The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system’s “Value” category. Stocks with “A” grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is BorgWarner (BWA). BWA is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.04 right now. For comparison, its industry sports an average P/E of 21. Over the past year, BWA’s Forward P/E has been as high as 10.16 and as low as 6.47, with a median of 8.47.
BWA is also sporting a PEG ratio of 0.64. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company’s expected earnings growth rate. BWA’s industry currently sports an average PEG of 1.08. Over the last 12 months, BWA’s PEG has been as high as 0.73 and as low as 0.24, with a median of 0.29.
We should also highlight that BWA has a P/B ratio of 1.45. The P/B ratio pits a stock’s market value against its book value, which is defined as total assets minus total liabilities. BWA’s current P/B looks attractive when compared to its industry’s average P/B of 2.70. Within the past 52 weeks, BWA’s P/B has been as high as 1.58 and as low as 1.04, with a median of 1.32.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s sales. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. BWA has a P/S ratio of 0.68. This compares to its industry’s average P/S of 0.79.
These figures are just a handful of the metrics value investors tend to look at, but they help show that BorgWarner is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BWA feels like a great value stock at the moment.
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BorgWarner Inc. (BWA) : Free Stock Analysis Report